Investigations conducted in our laboratory revealed that skeletal cells synthesize growth factors that modify the replication, differentiation and function of the osteoblast. Locally produced factors are regulated by changes in synthesis, receptor binding and binding proteins. Osteoblasts synthesize bone morphogenetic proteins (BMPs). However, information about the regulation of BMPs in bone is limited. We found that BMPs stimulate osteoblasts to produce noggin and gremlin, proteins that bind and impair the actions of BMPs in vitro, although activities of noggin and gremlin independent of BMP binding have not been excluded. The objective of this project is to understand the function of noggin and gremlin in bone in vivo and to study their mechanisms of action in vitro. We created transgenic mice that overexpress noggin under the control of the osteocalcin promoter. These mice develop osteopenia and fractures, despite a normal number of osteoblasts, indicating that either BMPs are required for the maintenance of bone integrity, or that noggin has direct actions on bone cell function. In the course of the proposed studies, we plan to investigate the roles of noggin and gremlin in vivo and in vitro. Our Specific Aims are: (1) to determine the function of noggin and gremlin in vivo by transgenic overexpression of the two glycoproteins under the control of the osteocalcin promoter so that expression occurs in osteoblasts and in the bone microenvironment. The skeletal phenotype of transgenic mice will be compared to that of wild-type mice and determined by histomorphometry, contact radiography, densitometry and micro-CT scanning; (2) to determine the function of noggin and gremlin in vivo by targeted gene inactivation in osteoblasts, achieved by intercrosses between transgenic mice expressing the Cre recombinase under the control of the osteocalcin promoter and mice in which the noggin and gremlin gene are flanked by loxP sequences. The skeletal phenotype will be assessed with histomorphometric and radiological techniques; and (3) to determine the mechanism of action of noggin and gremlin in vitro, utilizing retroviral vectors to overexpress noggin and gremlin in stromal and osteoblastic cell lines. The impact of noggin and gremlin on the differentiation and function of cells of the osteoblastic lineage will be determined and also compared to that of noggin and gremlin mutants that fail to bind BMPs. These investigations should clarify the role of noggin and gremlin, as well as the role of BMPs, in bone cell function.